Two Los Angeles Ralphs stores and a Food 4 Less store described by officials as “long-struggling” will close in mid-May following the city’s passage of a $5 “hero pay” bump for grocery workers.
The decision to close the locations was “accelerated” by the Los Angeles City Council mandate passed earlier this month, Kroger officials said in a news release.
“The mandate will add an additional $20 million in operating costs over the next 120 days, making it financially unsustainable to continue operating underperforming locations,” the news release reads.
“The Los Angeles City Council disregarded their own Economic Impact Report by not considering that grocery stores – even in a pandemic – operate on razor-thin profit margins in a very competitive landscape.”
Officials said the costs will make it “impossible” for the stores, located in Pico-Robertson, Hyde Park and East Hollywood, to continue to operate.
L.A.’s hero pay bump applies to grocery, pharmacy and some retail workers and the $5 per hour boost will come on top of employees’ base pay for 120 days amid the ongoing coronavirus pandemic.
Similar ordinances had passed by the Los Angeles County Board of Supervisors for workers in unincorporated areas of the region and the Long Beach and Montebello city councils.
The West Hollywood City Council also extended its $5 an hour pay increase for grocery workers to pharmacy staff this month, but it won’t take effect until April 16, WEHOville reported.
And a $4 per hour pay hike passed in February by the Irvine City Council is set to kick in later this month, the Orange County Register reported.
Previously, Kroger announced the closure of two Ralphs and Food 4 Less stores following Long Beach’s passage of their pay boost.
In a statement after the announcement of the store closures, the Valley Industry & Commerce Association called the passage of the pay bump “the wrong decision” and urged the L.A. City Council to consider other long-term economic impacts of the measure.
“It is wrong and hypocritical for the City to expect these suffocating provisions from businesses when they are not themselves providing ‘Hazard Pay’ to the countless City employees that are keeping our city running,” the statement read. “The future is bleak for Los Angeles. If the City Council continues to insert itself in business affairs, disregarding community concerns, expert warnings, and concrete evidence, businesses will not want to invest in Los Angeles.”
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